Given all that’s happened recently, some people are talking about a recession. What’s that? It’s technically when there are two consecutive quarters (or more) of negative gross domestic product growth. Basically, it’s when the economic engine slows down.
Since 1980, we’ve had six recessions. We aren’t there yet. But if we do get there, don’t fret too much. In five of the last six recessions, the S&P 500 was up a year later.
Plus, it’s possible to succeed in almost all market conditions. I don’t mean there are ways where it’s impossible to lose. Rather, there are some stocks that seem to do quite well in recessions. These kinds of stocks are “durable” – they’re well-established names and tend to pay dividends. Let me show you what I mean.
Focusing on quality is paramount when markets are under pressure. Using my firm MAPsignals’ database, I’ve filtered for various quality metrics and a history of Big Money investment to identify five stocks that tend to do well in harder economic times: WMT, ABT, JNJ, GIS, & HSY.
Up first is Walmart Inc. (WMT), the discount retail giant.
Even though great stocks can be choppy, like WMT over the past year, these companies are worthy of attention, especially when they have a tech-oriented growth strategy and huge hiring plans. Check out WMT:
Just to show you what our Big Money signal looks like, have a look at the top buy signals WMT has made over the years in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.
When you see a lot of them, I call it the stairway to heaven:
But, what about fundamentals? As you can see, WMT’s sales and earnings growth rates have held strong, and its earnings growth estimate is appealing:
3-year sales growth rate (+3.7%)
3-year EPS growth rate (+41.0%)
2-year vs. 1-year EPS growth rate estimate (+7.6%)
What about WMT in a downturn? Over the last six recessions, its average return is an astounding (+34.4%).
Next up is Abbott Laboratories (ABT), the…